Small Beer: With liquor taxes up and incomes down, Illinois drinking habits change

Illinois alcohol sales
RED SHIFT: Did the recession make drinkers spend more, drowning their sorrows, or spend less, saving their pennies? Neither, really—the big change was decreased beer sales and increased sales of wine and liquor. Here’s how much alcohol Illinois distributors have sold to retailers, bars, and restaurants between 2007 and June 2009, measured in gallons.
 

Hard times call for hard liquor. And cheaper beer. And house parties. The great strain on the economy, it turns out, doesn’t significantly change alcohol consumption—but it affects what we drink and where.

Sales of beer to retailers and venues in Illinois dropped 2 percent, from 134.3 million gallons in the first half of 2008 to 131.8 million gallons in the first half of 2009. During the same period, sales of wine (and other liquors with 14 to 20 percent alcohol) jumped 18 percent, from 1 million gallons to 1.2 million. Hard liquor also gained ground, while wine coolers and other drinks with less than 14 percent alcohol dived from 2007 to 2008, then started to recover in the first half of 2009.

Beer

The tendency toward wine and hard liquor may be part of a larger trend of getting more bang for the buck. Danny Brager, who researches alcoholic beverage trends for The Nielsen Company, says drinkers are imbibing at home, switching to cheaper brands, buying bigger packages, and looking for deals. Wine is resilient not only because it’s a common dinner-table drink but also because it’s popular among drinkers with more disposable income. Similarly, bucking the trend of trading down from the middle to the low end, some other high-end drinks are faring well: According to Nielsen data, craft beers are the fastest-growing segment of the beer category. “Value isn’t always the lowest price,” Brager says. “It’s getting the most for your money.”

At the Old Town Ale House, that search for value isn’t so subtle. A September hike in state liquor taxes meant raising prices on shots and mixed drinks, but the bar held the line on beer prices. Most patrons now stick to beer, especially bulk-buying pitchers of Old Style, PBR, and Miller Lite, and nursing them, says AnnaMarie Crespo, a manager at the bar. “People drink a little slower,” Crespo says. “They’re not pounding like they used to.”

 

Snap Shots

43%
Proportion of Illinoisans who report going to bars or nightclubs less frequently than they did a year ago. The national average is 38 percent.

37%
Proportion of Illinoisans who report that when they do go out, they’re having an alcoholic drink less often than they did last year. The national average is 33 percent.

 

Illustration: UNDRCRNT
Sources: (“Red Shift”) Illinois Department of Revenue; (“Snap Shots”) The Nielsen Company

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